ACC101 4 – Flashcards

QN=76 Flash has beginning equity of $257,000, net income of $51,000, withdrawals of $40,000 and investments by owners of $6,000. Its ending equity is: a. $223,000. b. $240,000. c. $268,000. d. $274,000. e. $208,000.

QN=77 A company's balance sheet shows: cash $22,000, accounts receivable $16,000, office equipment $50,000, and accounts payable $17,000. What is the amount of owner's equity? a. $17,000. b. $29,000. c. $71,000. d. $88,000. e. $105,000.

QN=78 An account used to record the owner's investments in the business is called a(n): a. Withdrawals account. b. Capital account. c. Revenue account. d. Expense account. e. Liability account.

QN=79 Withdrawal account, revenues account, expenses account and income summary account are a. Permanent accounts b. Temporary accounts c. Equity accounts d. Closing accounts e. None of these above

QN=80 The account used to record the transfers of assets from a business to its owner is: a. A revenue account. b. The owner's withdrawals account. c. The owner's capital account. d. An expense account. e. A liability account.

QN=81 Unearned revenues are: a. Revenues that have been earned and received in cash. b. Revenues that have been earned but not yet collected in cash. c. Liabilities created when a customer pays in advance for products or services before the revenue is earned. d. Recorded as an asset in the accounting records. e. Increases to owners' capital.

QN=82 Prepaid expenses are: a. Payments made for products and services that do not ever expire. b. Classified as liabilities on the balance sheet. c. Decreases in equity. d. Assets that represent prepayments of future expenses. e. Promises of payments by customers.

QN=83 A debit is: a. An increase in an account. b. The right-hand side of a T-account. c. A decrease in an account. d. The left-hand side of a T-account. e. An increase to a liability account.

QN=84 The right side of a T-account is a(n): a. Debit. b. Increase. c. Credit. d. Decrease. e. Account balance.

QN=85 Which of the following statements is incorrect? a. The normal balance of accounts receivable is a debit. b. The normal balance of owner's withdrawals is a debit. c. The normal balance of unearned revenues is a credit. d. The normal balance of an expense account is a credit. e. The normal balance of the owner's capital account is a credit.

QN=86 A credit is used to record: a. A decrease in an expense account. b. A decrease in an asset account. c. An increase in an unearned revenue account. d. An increase in a revenue account. e. All of these.

QN=87 A simple account form widely used in accounting as a tool to understand how debits and credits affect an account balance is called a: a. Withdrawals account. b. Capital account. c. Drawing account. d. T-account. e. Balance column sheet.

QN=88 Which of the following statements is correct? a. The left side of a T-account is the credit side. b. Debits decrease asset and expense accounts, and increase liability, equity, and revenue accounts. c. The left side of a T-account is the debit side. d. Credits increase asset and expense accounts, and decrease liability, equity, and revenue accounts. e. In certain circumstances the total amount debited need not equal the total amount credited for a particular transaction

QN=89 Which is true about An account balance: a. Always a debit. b. Is the difference between the total debits and total credits for an account c. Is the difference between the total debits and total credits for an account including the beginning balance d. None of these e. Always a credit.

QN=90 Of the following accounts, the one that normally has a credit balance is: a. Cash. b. Office Equipment. c. Sales Salaries Payable. d. Owner, Withdrawals. e. Sales Salaries Expense.

QN=91 A debit is used to record: a. A decrease in an asset account. b. A decrease in an expense account. c. An increase in a revenue account. d. An increase in the balance of an owner's capital account. e. An increase in the balance of the owner's withdrawals account.

QN=92 Wisconsin Rentals purchased office supplies on credit. The general journal entry made by Wisconsin Rentals will include a: a. Debit to Accounts Payable. b. Debit to Accounts Receivable. c. Credit to Cash. d. Credit to Accounts Payable. e. Credit to Wisconsin Rentals, Capital.

QN=93 An asset created by prepayment of an expense is: a. Recorded as a debit to an unearned revenue account. b. Recorded as a debit to a prepaid expense account. c. Recorded as a credit to an unearned revenue account. d. Recorded as a credit to a prepaid expense account. e. Not recorded in the accounting records until the earnings process is complete.

QN=94 On September 30, the Cash account of Value Company had a normal balance of $5,000. During September, the account was debited for a total of $12,200 and credited for a total of $11,500. What was the balance in the Cash account at the beginning of September? a. A $0 balance. b. A $4,300 debit balance. c. A $4,300 credit balance. d. A $5,700 debit balance. e. A $5,700 credit balance.

QN=95 On April 30, Holden Company had an Accounts Receivable balance of $18,000. During the month of May, total credits to Accounts Receivable were $52,000 from customer payments. The May 31 Accounts Receivable balance was $13,000. What was the amount of credit sales during May? a. $ 5,000. b. $47,000. c. $52,000. d. $57,000. e. $32,000.

QN=96 During the month of February, Hoffer Company had cash receipts of $7,500 and cash disbursements of $8,600. The February 28 cash balance was $1,800. What was the January 31 beginning cash balance? a. $700. b. $1,100. c. $2,900. d. $0. e. $4,300.

QN= 97 The following transactions occurred during July: 1. Received $900 cash for services provided to a customer during July. 2. Received $2,200 cash investment from Barbara Hanson, the owner of the business. 3. Received $750 from a customer in partial payment of his account receivable which arose from sales in June. 4. Provided services to a customer on credit, $375. 5. Borrowed $6,000 from the bank by signing a promissory note. 6. Received $1,250 cash from a customer for services to be rendered next year. What was the amount of revenue for July? a. $ 900. b. $ 1,275. c. $ 2,525. d. $ 3,275. e. $11,100.

QN=98 If Tim Jones, the owner of Jones Hardware proprietorship, uses cash of the business to purchase a family automobile, the business should record this use of cash with an entry to: a. Debit Salary Expense and credit Cash. b. Debit Tim Jones, Salary and credit Cash. c. Debit Cash and credit Tim Jones, Withdrawals. d. Debit Tim Jones, Withdrawals and credit Cash. e. Debit Automobiles and credit Cash.

QN=99 Zed Bennett opened an art gallery and as a dealer completed these transactions: 1. Started the gallery, Artery, by investing $40,000 cash and equipment valued at $18,000. 2. Purchased $70 of office supplies on credit. 3. Paid $1,200 cash for the receptionist's salary. 4. Sold a painting for an artist and collected a $4,500 cash commission on the sale. 5. Completed an art appraisal and billed the client $200. What was the balance of the cash account after these transactions were posted? a. $12,230. b. $12,430. c. $43,300. d. $43,430. e. $61,430.

QN=100 At the beginning of January of the current year, Thomas Law Center's ledger reflected a normal balance of $52,000 for accounts receivable. During January, the company collected $14,800 from customers on account and provided additional services to customers on account totaling $12,500. Additionally, during January one customer paid Thomas $5,000 for services to be provided in the future. At the end of January, the balance in the accounts receivable account should be: a. $54 b. $49 c. $2 d. $54 e. $49